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S&S Benefits.....Opinion, Hearsay & News Review

S&S Benefits Consulting, Inc. 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: jseiler@ssbenefits.net www.ssbenefits.net December 2004 Issue

HAPPY HOLIDAYS! MERRY CHRISTMAS! HAPPY NEW YEAR!

According to the Aon Fall Health Trend Survey, medical trend (including Rx) is as follows: HMO-13.3%, POS-13.6%, PPO-13.6%, Indemnity-15.4% and CDHP-13.7%. Dental is: DMO-4.3%, DPPO-7%, Indemnity-7.4%. Stand-alone Rx is 13.1% Pharmacy included as part of medical trend means about .4% of the above trend figures are for pharmacy.

According to a Rand Corp. study, researchers found underuse of recommended services 46% of the time, with non-recommended and possibly harmful care taking place 11% of the time. In this arena of malpractice suits and suits against managed care organizations, perhaps patients will have to start suing themselves?

Amidst all the CDHP hype, even Kaiser now will have a High Deductible HMO plan with an HSA account. In the meantime a Hewitt survey of 39,000 employees says that 93% of those surveyed feel comfortable taking on more responsibility for health care decisions, but few know how (see Rand study above). 79% of employees do not personally believe they can take action to control costs. 57% have never researched provider cost or quality and 24% have never asked about their Rx options. With help from their employers, 81% say they can talk to their doctors about treatment and Rx options; 71% can decide when to get a second opinion; 69% said they can better research their conditions; 65% said they could chose the best physician and 63% said they could choose the best hospital for their needs. No comment.

From Forrester Research we find that only 5% of employees blame their employers for high health care premiums. Among other factors, employees point to doctor and hospital costs (29%), price of drugs (19%), lack of government regulations (17%) and cost of new technologies (6%). According to Kaiser Family Foundation, 79% of adults with employer provided insurance say that their employer is doing the best they can. 76% would rather pay more to keep the same coverage than switch to a more restrictive plan. A survey by Americaís Health Insurance Plans says that 54% of all voters, including majorities among those who voted for both Bush and Kerry, think government mandated coverage is a bad idea.

Canadaís top health official has warned that his government may try to stop drug shipments to the U.S. if the trade keeps growing. The Health Minister is concerned that the trade may cause shortages in Canada.

Proving that for the right price, anything can be bought, even a government office, Anthem-Wellpoint received California Insurance Commissioner John Garamendiís approval of their merger. The agreement is to pay $365 million in contributions and investments in the California health care system. There is no word on whether Eliot Spitzer wanted in on the deal or if he will sue Garamendi for artificially raising the cost of insurance in California. PacifiCare has announced it is buying Pacific Lifeís health care unit, adding 140,000 members. UnitedHealth has said it will buy Definity Health for $300 million. At Definityís claimed 500,000 covered employees, that would be about $600 per employee for the TPA.

The 2005 Towers Health Cost Survey reported an average annual cost of $3,936 for single coverage, $8,016 for employee plus one and $11,340 for Family (a composite rate of $7,764 annually per employee). They expect average costs to rise by 8% in 2005. On average, employees pay 19% for single coverage and 25% for family coverage.

Eliot Spitzer is now going after ULR, a San Diego broker that has made no secret of their plan to dominate the life and disability market. Spitzerís suit charges ULR with extracting undisclosed fees paid by policyholders through higher premiums. The suit also alleges bid rigging on the part of ULR. From our conversations, few other brokers are surprised at these allegations.

The maximum HSA contributions will go up by $50 per single and $100 per family for 2005. The maximum out of pockets will increase by $100 per single to $5,100 annual and $200 per family to $10,200. The monthly limits for qualified transportation plans and parking benefits increased by $5 per month.

We recently had the chance to use the Hewitt outsourcing site called Your Benefits Resources. When the information on the site seemed incorrect (it was) we tried to call for clarification (questions could not be answered, plan supervisor with no more knowledge than customer service) and then tried the employer (no answers there since it was outsourced). Our impression: if you really could care less about your employees and managing your health plan, outsource all the administration for big dollars, so you can totally lose control of those costs and make open enrollment a nightmare.

We have a CD ROM multi-media presentation available for prospective clients who would like to consider using our services as a health and welfare consultant or broker. Please email us for a copy if you would like to learn more.

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STREET TALK-WHY BE LIKE EVERYONE ELSE?